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Mumbai: Of the top stocks that touched record high this month on BSE, more than half are consumption-linked, hinting that the slowdown in the consumption space has been selective and temporary and not broadbased and permanent in nature.

Ironically, BSE FMCG and consumer discretionary goods and services indices are down 7 per cent and 11 per cent so far this year. Both these indices had hit record high levels last September.

Even though high frequency indicators and channel checks point to a slowdown, experts say it is concentrated in a few sectors and areas. Barring those, all is not lost.

“Consumption has not really slowed down. The patterns are changing in consumption. People have been slow in taking loans, but they have been aggressive in investing in mutual fund SIPs and insurance products,” said Deven Choksey, Group Managing Director, KR Choksey Investment Managers.

“People have been buying premium products while low-end products are seeing a slowdown. Bulk consumption items are slowing down, but premium products are doing well,” said Choksey.

Parle Products, the biscuit bellwether and maker of Parle-G, Monaco and Marie, has just hit the alarm button. The country's biggest biscuit producer that employed 1 lakh workers said it could end up mass-firing some 10,000 employees if the slowdown pain does not subside.

It is not Parle alone which is facing the heat. Amid weak consumer demand, Britannia's net profit sank 3.5 per cent in June quarter.

The auto sector has been the worst hit. The passenger vehicles industry in Asia’s third-largest economy suffered its worst sales performance in nearly 19 years in July as a slowing economy, higher ownership costs and floods in some states deterred buying decisions.

Sales tumbled 31 per cent to 2,00,790 vehicles last month from a year ago, data released by the Society of Indian Automobile Manufacturers (Siam) showed. This was the worst sales performance since a 35 per cent drop in December, 2000.

“Consumption has slowed down, especially on the discretionary side than the auto side. Now if I look at the consumption piece minus auto, then the numbers do not look that bad,” said Jyoti Vaswani, Chief Investment Officer, Future Generali Life Insurance. She pointed out that last year the consumption growth numbers were very high.

“All the FMCG companies have reported 8 to 10 per cent volume growth. Now on a high base, if you are growing at 6-7 per cent, that is a good number and you are getting back to a normalised growth rate,” she said.

While consumption may have slowed down in pockets, it remains a promising long-term story in the world’s second-most populous country, with varied demographics and rising middle-income group.

“The way it is being made out that there is a huge slowdown is not the case in reality. If you look at the biscuit company itself, the volume growth was there in last quarter numbers and it does not take away the fact that there is some slowdown. But is it as bad? Probably not,” she said.